Seaport San Diego project gets 3-year extension from Port to over 10 years from concept to begin construction
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| San Diego Emarcadero - home of Seaport Village to be replaced |
Summary
1. Project overview:
- The project aims to transform the Central Embarcadero area, including Seaport Village, into a world-class destination.
- It's estimated to cost $3.8 billion and cover 105 acres of land and water.
- The developer is 1HWY1, led by Yehudi "Gaf" Gaffen and backed partly by the Jacobs family.
2. Timeline:
- 1HWY1 was selected as the developer in November 2016.
- The project has experienced delays; originally, construction was hoped to start in 2020.
- As of August 2024, the project is still in the pre-development and approval phase.
- The Port of San Diego has granted a 3-year extension to the exclusive negotiating agreement (ENA) with 1HWY1, pushing the end date to October 1, 2027.
- This gives the developers a total of 10 years from concept to construction, the longest ENA period in the port's history.
3. Current status:
- The project is undergoing environmental review as required by the California Environmental Quality Act (CEQA).
- A draft environmental impact report is expected in the third quarter of 2025.
- Final approval from the Port of San Diego board is anticipated in mid-2026.
- After that, the project will need approval from the California Coastal Commission, which could take a year or more.
4. Recent developments:
- The project description was released in August 2024, detailing plans for 2.7 million square feet of mixed-use development.
- Some changes have been made to the original plan, including a reduced footprint in the water due to federal agency concerns.
5. Next steps:
- The project needs to complete the environmental review process and finalize an amendment to the Port Master Plan.
- 1HWY1 is working on raising investor capital to continue moving through the entitlement and environmental review phase.
In summary, while the Seaport San Diego project has made progress in planning and design, it is still several years away from breaking ground, with construction unlikely to start before 2027 at the earliest. Meanwhile the kitchy mom and pop shops in Seaport Village continue to operate under a cloud, and there is no clear date when demolition and reconstruction will start.
Seaport San Diego project gets 3-year extension to secure government approvals – San Diego Union-Tribune
The mega project that promises to turn the bayfront area currently home to Seaport Village into a world-class destination punctuated by a 500-foot observation tower will need at least another three years before it’s shovel ready.
Tuesday, the Board of Port Commissioners unanimously approved an amended and restated exclusive negotiating agreement with Seaport San Diego developer 1HWY1 to allow the project to secure government approvals. The board’s latest action pushes the agreement’s end date to Oct. 1, 2027, giving the development team an unprecedented 10-year window to take the project from concept to construction.
The board approved the item as part of the consent agenda, meaning they did not discuss the contract extension. Commissioners voted 6-0 with Commissioner Dan Malcolm absent.
“By extending the negotiating timeframe, the proposed (ENA) supports 1HWY1’s efforts to raise the significant investor capital necessary to continue moving the proposed development through the entitlement and environmental review phase,” the staff report prepared for Tuesday’s board meeting said.
Backed in part by San Diego’s well-known Jacobs family, Seaport San Diego envisions a complete remake of downtown’s Central Embarcadero, a Port of San Diego subdistrict that includes Seaport Village and follows the waterfront from Embarcadero Marina Park North to the G Street Mole, just south of the USS Midway Museum.
In November 2016, the port selected the entity now known as 1HWY1 to redevelop the expansive area following a competitive bidding process. 1HWY1 is headed by Yehudi “Gaf” Gaffen, Jeff “JJ” Jacobs (son of Irwin Jacobs) and Jeff Essakow. The following year the parties entered into an exclusive negotiating agreement, or ENA. ENAs are designed to allow the developer time to obtain entitlements and typically include milestones that keep the timeline in check.
The Seaport San Diego project has morphed since its selection.
In September, the port initiated its environmental review of the $3.8 billion Seaport San Diego project, as required by the California Environmental Quality Act. The project description included in the Notice of Preparation identifies 2.7 million square feet of mixed-use development, including 2,050 hotel rooms spread across seven properties, 215,000 square feet of retail and restaurant space, 220,067 square feet of office space for ocean research, 159 boat slips, 16 acres of parks and open space, and 2,250 parking spaces.
The original ENA dates to October 2, 2017, and allowed a two-year window for negotiations. Since then, the contract has been extended several times, with the board approving in late 2020 an amended ENA with an expiration date of Oct. 1, 2024. The project’s timeline has been pushed back substantially in turn. Originally, the development team hoped to start construction in 2020.
The amended ENA now allows for the pre-development, entitlement period to run for 10 years, through Oct. 1, 2027.
“It’s taken longer than I had anticipated. The project complexity is really significant and all the issues we’ve had to deal with, including the COVID period, have affected us,” Gaffen told the Union-Tribune. “We’re committed. We think we can get it done within the 10 years. … The clarity is there on what’s ahead of us.”
The 10-year ENA period is the longest in the port’s history, in part because the agency only started using the contracts in 2015, a spokesperson for the agency said.
1HWY1 needs additional time to complete the environmental review process and finalize an amendment to the Port Master Plan.
“1HWY1’s proposed project is currently going through CEQA review, as well as review by the California Coastal Commission, and, if constructed, will be located within downtown San Diego — the highest density location in the county,” the port spokesperson said. “All of these factors increase the timeframe to move from the ENA phase to presenting any sort of entitlements or definitive development agreement to the board for consideration.”
The developer has been working on revisions to the project description, which serves as the basis for the state-mandated environmental analysis. The plan now calls for a reduced footprint in the water, with 1HWY1 abandoning a desire to take advantage of the port’s expanded jurisdiction and wade into what’s known as “the doughnut hole” with elongated piers. The extended water-use plan received pushback from federal agencies concerned about protecting wide passageways for large ships through the federal navigation channel, Gaffen said.
The change means shorter piers and slightly fewer boat slips, he said.
The new timeline, necessitated by the ongoing project changes, should see the port release a draft environmental impact report in the third quarter of 2025, according to the staff report. A final document would then go before the board in the middle of 2026, Gaffen said. After that, the agency would need a year or more to process the required Port Master Plan Amendment with the California Coastal Commission.
The revised contract also strikes an extension fee, pre-approves some ownership transfers and means the port will now request information from the development team as needed as opposed to relying on a pre-set schedule for submittals.
The ownership transfer language will allow 1HWY1 to bring in a limited partner with an equity stake in the project without first getting port staff or board consent.
As it stands, 1HWY1’s primary owners are Protea Waterfront Development; Odysea San Diego LLC; Bean Realty Partners, L.P.; and RCI SD, LLC. The remaining owners are passive equity investors. Ownership transfers are allowed under the amended ENA in most cases so long as Protea Waterfront Development remains the development entity’s managing member with decision-making authority.
Gaffen said the addition of a limited partner is likely but declined to share additional details.
Although 1HWY1 is required to pay for the bulk of the pre-development work during the ENA period, the port has absorbed some costs associated with the project. To date, the agency has spent $320,000 on third party consultants for work related to the project, the staff report said.
Originally Published:
Mega Plan to Replace Seaport Village Unveiled
$3.5B Seaport San Diego project grows to include 105 acres of land, water
BY JENNIFER VAN GROVE
A rendering shows a view from Block D of the planned Seaport San Diego, which includes the new Ruocco Park, a children’s play area and an event lawn.
With a more fully baked site plan and an estimated cost of $3.5 billion, the long-awaited Seaport San Diego project from developer 1HWY1 is now available for public examination.
Today,
the Port of San Diego released the Seaport San Diego project
description, a 167-page document with development specifics and
narrative descriptions for each of the project’s seven land blocks and
five water zones. The document, which is more than five years in the
making, will go before port commissioners at the March 8 board meeting
where they’ll get to weigh in on — but not approve — the latest
iteration of the mega project that promises to substantially alter the
city’s front porch.
“We’re breaking the pencil, as I would call
it, and cementing in place the final project,” said Yehudi “Gaf ”
Gaffen, who runs 1HYW1. “It’s a one-of-a-kind, transformational
mixed-use project on the water that I truly do believe is going to set
the bar for other projects, if not in the United States then in the
world.”
Backed in part by San Diego’s famed Jacobs family, Seaport San Diego is a total reimagining of downtown’s Central Embarcadero — the expansive, bayfront area that includes Seaport Village and follows the coast from Embarcadero Marina Park North to the G Street Mole, just south of the USS Midway Museum. Following a competitive bidding process, the port selected 1HWY1 in November 2016 to redevelop the subdistrict.
Over
the years, the redevelopment effort has swelled in size and now
includes 105 acres of land and water area — and 2.7 million square feet
of mixed-use development — in and around San Diego Bay. It’s also
ballooned in price, adding billions to the bottom line with each
iteration presented to the port.
Today, the program envisions a
total of 2,058 hotel rooms spread across seven properties, including 400
rooms taking up 24 of the 34 stories planned for a 500- foot,
skyline-defining observation tower at the foot of Pacific Highway.
Additional features include 597,600 square feet of floating docks and
fixed piers, 229,213 square feet of retail and restaurant space, 308,524
square feet of office space reserved for ocean researchrelated
enterprises, a 129,900-square-foot public beach, and nearly 15 acres of
parks and open space.
1HWY1 proposal selected for Port of San Diego waterfront redevelopment – The Log
10-month selection process ends with Gafcon being selected to develop about 70 acres of land along harbor.
SAN DIEGO — Attempts to create a world-class destination along the downtown San Diego waterfront inched closer to reality Nov. 8, when the Port of San Diego’s Board of Port Commissioners selected Gafcon, through its 1HWY1 proposal, to redevelop 70 acres of land and water at Seaport Village into a visitor-serving gathering place.
The 1HWY1 proposal would bringseveral entities together to build a boater-, tourist- and visitor-serving project at Seaport Village. Plans call for marina dockage for 24 mega-yachts, 51 commercial vessels and 82 recreational boats at Tuna Harbor, office spaces and a charter school offering marine education.
A 480-foot high observation tower called SkySpire highlights Gafcon’s proposal. If built the Space Needle-like tower would be a signature building for San Diego’s urban skyline. Also featured in the redeveloped waterfront would be an aquarium, butterfly exhibition, three hotel properties and retail space.
The project, according to reports, would take about 10 years to complete and cost $1.2 billion. Construction could start as early as 2020.
Commissioners acknowledged while changes to Gafcon’s proposal would occur, they hope the developer’s overall vision will be realized.
“Is this a $1.2 billion deal today, and a year from now, and two years from now and five years from now? [What if] it becomes an $800 million deal because we can’t raise the funds or something happens,” Board of Port Commissioners Chair Marshall Merrifield asked. “What I’d hate to see is, in this process and the changes that go on, whatever they may be, for us to have something less [than what Gafcon is promising to deliver].”
Commissioner Rafael Castellanos said Gafcon’s 1HWY1 proposal was mostly in tune with the port district’s long-range vision for waterfront redevelopment.
“The reason that this particular proposal received such strong support is because … those of us who had been working on this for years … saw it, I knew it best reflected the work we had been doing for a long time,” Castellanos said.
Gafcon’s proposal was attractive to port commissioners due to its detailed financial analysis and proposal.
“The project components were bold, creative, compelling, iconic, dynamic and well-thought out. I particularly liked the well-designed expansions of the public realm area,” Malcolm told his colleagues. “This project spoke to me as truly a world-class project.”
Five other developers – Great Western Pacific, HKS, McWhinney, Oliver McMillan and Ripley Entertainment – were considered for the redevelopment project.
The 70-acre stretch of waterfront primed for redevelopment includes prime Downtown San Diego properties such as Seaport Village, Chesapeake Fish and surrounding areas between the Hyatt and the USS Midway Museum.
“There are a lot of expectations now,” Merrifield said. “We need to gather to make this a big, beautiful, wonderful place for San Diego, but not a half-beautiful space for San Diego.”
1HWY1 is the latest in a series of revitalization or redevelopment projects the port district is either in the process of executing or considering for approval. The to-be-created 1HWY1 entity would include Gafcon, waterfront developer RCI Marine Group, aquarium operator OdySea and observation attraction developer and operator ThrillCorp.
Port district staff has expended quite a bit of effort in trying to get the Chula Vista Bayfront redevelopment project rolling.
Other projects are in the works at Harbor Island and Marriott Marquis Marina.
(photo provided by Port of San Diego)
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